Shares of Suntech have jumped on the news, gaining 2.6% to $1.20, while the Guggenheim Solar (TAN) exchange-traded fund has gained 0.8%. Other Chinese solar companies including LDK Solar (LDK) and Yingli Green Energy (YGE) have dropped this morning, 2.5% and 4.7%, respectively.

The ultimate monetization of the GSF Fund will provide much needed capital infusion BUT this may not be enough to assure long term viability…Assuming a full monetization, we estimate that Suntech (post ownership settlement of 88.15%) could receive ~$325mm with [Dr. Zhengrong Shi, Suntech's founder,] receiving ~$44mm. It remains to be seen whether Dr. Shi will use his ownership interest following a monetization for personal reasons or provide STP with additional liquidity which it materially needs.

But Suntech has a convertible bond coming due next week no Mar. 15, and it remains to be seen whether it has the cash to pay up. Pourreza and Lam write:

The main overhang remains the $575mm convertible bond due on Match 15th, 2013 – a positive outcome with the bond maturity could cause us to become more constructive on shares, all else equal. As a reminder, current credit support from China is not available to pay off this $575mm convertible bond which is primarily held by international investors. A debt restructure appears to be the main solution though this prospect remains challenging since Suntech isn’t dealing with local creditors. It remains to be seen whether the Chinese government will come in and provide the liquidity needed to account for the convertible maturity. As we highlighted in the past, China’s State Council already signaled it would limit/halt lending to the money losing industry including a ban on provisional government lending. Additionally, as reported by the local media, the Chairman of the China Development Bank (CDB), Chen Yuan, reinforced their notion at their annual session of parliament – warning that future lending to the solar industry would be curtailed significantly.

At this juncture, STP’s equity value could worth zero unless CDB steps in as a white knight. We reiterate our Sell…thesis on STP shares. At this juncture, fundamentals are taking a back seat and the real driver will center on investor perception regarding the long-term viability of the company. Our negative stance remains until we get more visibility on next week’s bond maturity.

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Emerging markets have been synonymous with growth, but the outlook for individual nations is constantly changing. Countries from Brazil and Russia to Turkey face challenges including infrastructure bottlenecks, credit issues and political shifts. Barrons.com’s Emerging Markets Daily blog analyzes news, data and research out of emerging markets beyond Asia to help readers navigate the investment landscape.

Barron’s veteran Dimitra DeFotis has been blogging about emerging market investing since traveling to India and Turkey. Based in New York, she previously wrote for Barron’s about U.S. equity investing, including cover stories and roundtables on energy themes. Dimitra was among the first digital journalists at the Chicago Tribune and started her career as a police reporter at the Daily Herald in the Chicago suburbs. Dimitra holds degrees from the University of Illinois and Columbia University, where she was a Knight-Bagehot Fellow in the business and journalism schools. She studies multiple languages and photography.